Università Roma Tre

MICROECONOMICS
Prof. A. Trezzini

The Microeconomics course deals with the part of the economic analysis that has as its object the determination of the exchange value of individual goods, as well as the related problem of income distribution.
In the first part of the course the fundamental elements concerning the individual production processes and their mutual relations are presented.
The second part of the course considers how the problem of the exchange value of goods and the distribution of the income produced has been addressed within the theoretical approach of classical economists.
The third part of the course studies the basic elements of marginalist microeconomics. The theory of production and firm in perfect competition and the theory of consumer and exchange are analyzed.
The fourth part of the course is dedicated to the theories of the firm and the individual industry in monopoly and oligopoly conditions.
A fifth conclusive part will be dedicated to a comparison between the two alternative approaches to the problems of value and distribution: the classical one and the marginalist one.

I. Production Theory
A) The individual production process
1. Method of production; means of production; production cycle; technical coefficients.
2. Fixed capital and circulating capital.
B) The production process in the economy as a whole
3. Conditions of reintegration. Subsistence economy. Economy with surplus; multiplicity of possible compositions of surplus; ideal distinction between the sector that produces the subsistence and the sector that produces the surplus.

II. Relative prices and distribution in Classical Political Economy
4. Theories of income distribution
5. The explanation of wage in the theories of the classics
6. The analytical structure of the theories of the classics
7. The role of the concept of surplus
8. The link between distribution and relative prices
9. Competition and the tendency towards uniformity of the profit rate
10. The determination of the profit rate and relative prices
11. Profit rate and theory of value in Classical Political Economy
12. The Ricardo’s theory of Rent


III. The marginalist microeconomics
13. Structure of marginalist theories.
14. Consumer theory: substitutability between consumer goods; budget constraint; indifference curves; utility function; optimal consumer choice: maximisation of utility; demand functions of consumer goods. Intertemporal choice.
15. Theory of production: direct substitutability between productive factors; production function; functions of marginal product of factors; isoproduct curves (isoquants); isocost lines; profit maximization.
16. Theory of firm in 'perfect' competition: cost curves of the firm; supply curve of the firm and industry; short- and long-term equilibrium.
17. Direct and indirect substitutability of factors as an analytical basis for the demand functions of factors. Determination of distribution and relative prices in terms of supply and demand equilibrium.

IV. Theories of the firm and the market under monopoly and oligopoly conditions
18. Theory of the monopolistic firm: determination of price and quantity produced. Comparison of perfect competition and monopoly.
19. The problem of the interdependence of firms' decisions. Two models of oligopoly: the Cournot and Stackelberg models.

V. Distribution and price theories of classical economists and marginal economists.
20. Comparison between the general lines of the distribution and price theories of classical economists and those of marginal economists.

H.R.Varian (2012) Microeconomia, Venezia, Cafoscarina, settima edizione.
Dispensa n.1 Elementi di teoria della produzione (materiale didattico redatto dal Prof. R: Ciccone in collaborazione con il Dott. Trezzini)
Dispensa n.2 La teoria classica della distribuzione e dei prezzi relativi (materiale didattico redatto dal Prof. R: Ciccone in collaborazione con il Dott. Trezzini)
Dispensa n.3 La teoria marginalista della distribuzione e dei prezzi relativi (materiale didattico redatto dal Prof. R: Ciccone in collaborazione con il Dott. S. Fratini)

1. Introduction: Methods of economic analysis. Demand and supply. Price elasticity of demand. 2. Consumer theory: Preferences and utility. Consumer choice. Theory of demand. 3. Production theory: The production process. Costs minimization. Cost curves. 4. Market forms: Prefect competition. Monopolistic markets. Monopoly. Price discrimination. 5. Other topics: Game theory and strategic behavior. Risk and information. General equilibrium theory.

David A. Besanko e Ronald R. Braeutigam, Microeconomia, McGraw-Hill Education, 2016.
Further material will be provided during classes through the course website.

The first part of the course will introduce consumption and production theories. These theories are the fundamental components of equilibrium theory in perfectly and imperfectly competitive markets and in monopoly, and they will be analyzed in the second part of the course. The third and final part of the course will address issues such as the analysis of information asymmetries, externalities and public goods.

Frank R.H. e Cartwright E., Microeconomia, Mc Graw-Hill, 7a edizione, 2017.